{"id":77743,"date":"2026-09-05T07:39:00","date_gmt":"2026-09-05T07:39:00","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/wait-for-the-cftc-to-rewrite-the-rules\/"},"modified":"2026-09-05T07:39:00","modified_gmt":"2026-09-05T07:39:00","slug":"wait-for-the-cftc-to-rewrite-the-rules","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/wait-for-the-cftc-to-rewrite-the-rules\/","title":{"rendered":"Wait for the CFTC to Rewrite the Rules"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Kalshi\u2019s opposition brief is due within 30 days of New Jersey\u2019s Sept. 2 cert petition.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">CEO Tarek Mansour says a new CFTC rule is coming in weeks or months to clarify Rule 40.11.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The petition never mentions that rewrite, though it cites the rule twenty times.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>Three Executives, One Argument, No Brief Yet<\/h2>\n<p>At the time of writing, Kalshi has not filed anything at the Supreme Court, and its opposition brief is not due for a month \u2013 but the company has spent the past week making a clear argument in public through three people, giving legal watchers an idea of their upcoming strategy.<\/p>\n<p>Chief executive Tarek Mansour said in an <a href=\"https:\/\/www.rotowire.com\/article\/kalshi-ceo-speaks-out-on-court-rulings-nba-more-131142\" target=\"_blank\" rel=\"noopener noreferrer\">interview with RotoWire<\/a> that the Ninth Circuit ruling, which sided with New Jersey, \u201cadded more legal uncertainty than there was before.\u201d Per his framing, the courts largely agree on preemption, with \u201ca more narrow disagreement as to whether swaps can be sports,\u201d and much of the reaction \u201ccentered on Rule 40.11. The Key: There is likely a new rule coming in the next few weeks or the next few months that is going to clarify matters.<\/p>\n<p>Kalshi\u2019s head of litigation, Jovy Dedaj, writing on X, said the Ninth Circuit agreed with the Third on a fundamental point \u2013 with the latter\u2019s decision in favor of Kalshi \u2013 but that its decision \u201crests, in large part, on an incorrect interpretation of the CEA\u2019s Special Rule.\u201d The prediction market\u2019s spokeswoman, Dani Lever, echoed this argument to Bloomberg Law and CNBC: that the Ninth Circuit \u201cagreed with that key principle,\u201d and \u201cwhere it differed, it did so based on a regulation that\u2019s in the process of being rewritten.\u201d<\/p>\n<p>The new rule Kalshi gestures at is real: the CFTC <a href=\"https:\/\/news.bitcoin.com\/cftc-says-sports-contracts-involve-gaming-but-proposes-to-allow-almost-all-of-them\/\">proposed in June<\/a> to replace the flat prohibition with a case-by-case public interest review, under which sports would count as gaming, but most game-outcome and prop contracts would survive. The commission has actively filed amicus briefs on the prediction markets\u2019 side in state legal action, asserting exclusive jurisdiction, suing states over their enforcement actions directly. CFTC spokesman Zach Fulton told The Block in a statement that the Ninth Circuit misread the statute and regulations.<\/p>\n<p>In a concurrence to the <a href=\"https:\/\/cdn.ca9.uscourts.gov\/datastore\/opinions\/2026\/08\/28\/25-7516.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">Aug. 28 opinion<\/a>, Ninth Circuit Judge Kenneth K. Lee wrote that he did not think the court needed to reach the statutory question at all, because 17 C.F.R. \u00a7 40.11 bars gaming contracts, and while the commission has proposed revising it, \u201cit remains in the books and controls the outcome of this appeal.\u201d Third Circuit Judge Ryan D. Nelson\u2019s majority took the harder route, holding the contracts are not swaps because they are bets, and that reading the statute otherwise would assume Congress \u201chid an elephant in a mousehole.\u201d<\/p>\n<p>Nelson opened his opinion by quoting the company\u2019s own advertising back at it: \u201cthe first app for legal sports betting in all 50 states.\u201d Mansour\u2019s attempt to defuse this was to make the following argument to RotoWire: \u201cIf you\u2019re using the word \u2018bet\u2019 colloquially, you can bet on stocks. When you buy Tesla stock\u2026 you say, \u2018I\u2019ll just bet on Tesla.&#8217;\u201d<\/p>\n<p>The prediction market also has to reckon with its own past legal strategy here. Before the company entered sports, fighting the CFTC in the D.C. Circuit over election contracts, it conceded that gaming includes sports and that an illegal instrument cannot be saved by a public-interest review \u2013 which is the precise mechanism the proposed rule would install. The Ninth Circuit quoted the concession back at the company.<\/p>\n<p>New Jersey\u2019s petition is narrower than most coverage suggests. In Flaherty v. KalshiEX LLC, Attorney General Jennifer Davenport framed the question as whether Dodd-Frank \u201cpreempted States from regulating sports bets that occur within their jurisdictions if those bets are offered on markets registered with the Commodity Futures Trading Commission\u201d \u2013 meaning sports specifically, not event contracts generally. The filing describes a \u201cdirect, acknowledged, and irreconcilable split\u201d and says the companies have \u201calready dragged at least 20 States into litigation.\u201d<\/p>\n<p>Because Dodd-Frank also bars companies from offering swaps off CFTC-registered markets, the petition argues that if Kalshi is right, \u201cthen state-licensed sportsbooks that everyone has understood to be legal since Murphy \u2013 including at brick-and-mortar casinos \u2013 have apparently been violating Dodd-Frank all along.\u201d It calls implied displacement of state gambling law an \u201castonishing\u201d conclusion with grave \u201ceconomic and political consequences.\u201d<\/p>\n<p>John Holden of Indiana University\u2019s Kelley School of Business, <a href=\"https:\/\/sbcamericas.com\/2026\/09\/02\/kalshi-sports-betting-nj-legal-case\/\" target=\"_blank\" rel=\"noopener noreferrer\">speaking to SBC Americas<\/a>, set out the upcoming sequence of legal moves: Kalshi\u2019s opposition within 30 days, New Jersey\u2019s reply within 10 days of that, and a conference typically within a month afterward. The justices can then grant, deny, relist, or ask the Solicitor General for analysis \u2013 an option Holden said could add months, and one this case may warrant, given that the administration\u2019s own commission is already a party in interest on Kalshi\u2019s side. Bank of America told clients that the Court may still wait for cases pending in other circuits.<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/igaming\/kalshis-scotus-pregame-wait-for-the-cftc-to-rewrite-the-rules\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways Kalshi\u2019s opposition brief is due within 30 days of New Jersey\u2019s Sept. 2 cert petition. CEO Tarek Mansour says a new CFTC rule is coming in weeks or months to clarify Rule 40.11. The petition never mentions that rewrite, though it cites the rule twenty times. [&hellip;]<\/p>\n","protected":false},"author":3947362403,"featured_media":77744,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/77743"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362403"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=77743"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/77743\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/77744"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=77743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=77743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=77743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}